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Knowledge management – An Overview
Preamble
In the present day market scenario of intense competition, organizations need to know whatthey know and be able to leverage on it’s knowledge base to gain competitive advantage. In thisknowledge era, organisations can create and sustain competitive advantage through initiationof appropriate knowledge management processes. The organisations that can leveragetechnology to exploit the data will realize the benefits by creating a competitive advantage foritself. The competitive advantage could be in the form of identifying trends, unusual patterns,and hidden relationships. The recent emphasis on knowledge management arises out of theneed for organizations to manage resources more effectively in a hyper-competitive, globaleconomy. The need for emphasis on knowledge management is also stressed by Nonaka andTakeuchi in their statement ‘ In an economy where the only certainty is uncertainty, the onesure source of lasting competitive advantage is knowledge. Successful companies are those thatconsistently create new knowledge, disseminate it widely throughout the organization, andquickly embody it in new technologies and products’.
Knowledge in knowledge management
The importance of knowledge has been stressed by many management researchers and authors.Peter Drucker has declared that knowledge is just not another resource like labor, capital, but isthe only important resource today. Toffler subscribes to the views of Drucker, by proclaimingthat knowledge is the source of the highest-quality power and is the key to the powershift thatlies ahead.Quinn shares a similar view while stating that the economic and the producing power ofmodern organisations lies more in its’ intellectual assets and capabilities more than the othertangible assets.Nonaka and Takeuchi have focused on how Japanese companies have leveraged theirknowledge assets to gain competitive advantage and industry leadership.The paradox in knowledge management is that we are trying to manage what cannot bemanaged. Before we set about managing knowledge, we need to understand what the termknowledge refers to and the various classifications of knowledge.Davenport has defined knowledge as a ‘fluid mix of framed experience, values, contextualinformation, and expert insight that provides a framework for evaluating and incorporatingnew experiences and information. It originates and is applied in the minds of the owners ofknowledge. In organizations, it often becomes embedded not only in documents or repositories,but also in organizational routines, processes, practices and norms’Ryle, in one of his works, has explained the different categories of knowledge. First, knowledgeis referred to what is gained through the understanding of concepts and frameworks, generallyreferred to as ‘knowing why’. Another classification of knowledge, what Peter Senge termed as‘ capacity for action’, refers to an understanding of the facts and procedures required formaking things happen. Knowledge also refers to the codification of ‘factual knowledge basedon prior experience’ , which is generally tacit knowledge and is termed as ‘knowing that’. The
 
next usage of knowledge refers to codification of ‘factual
 
knowledge which is acquiredknowledge’ and this could be tacit or explicit. This term is also used while referring to ‘socialknowledge of networks’ indicating the persons known. This, in general terms, is referred to as‘knowing who’. Knowledge also refers to the cultural knowledge facilitating communication,which in common terms is termed as ‘knowledge of meaning’
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 Why knowledge management
The field of knowledge management has gained currency in recent times due to a wide varietyof reasons. Some of them are
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The speed of change in the market place has become so rapid that the time available fororganisations to gain experience and acquire knowledge has diminished. Organisationsare required to differentiate their product or produce them in fastest possible time andthe lowest possible cost.
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Competition in the market place has forced organisations to reduce costs. One of themethods followed is reduction in manpower. This has led to early retirements andincreasing mobility of work force resulting in a loss of knowledge
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Organisations are forced to compete on the basis of knowledge
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Market place is increasingly competitive
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Reduction is staffing create a need to replace informal knowledge with formal methods
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Reduction in work force due to competitive pressure
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Need for life-long learning is an inescapable reality
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Increasing dominance of knowledge as a basis for organisational effectiveness
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The failure of financial models to represent the dynamics of knowledge
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The failure of information technology by itself to achieve substantial benefits fororganisations for organizations
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The diffusion of global capabilities causing developed countries to become service-basedeconomies depending on labor from developing countries
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The unintended consequences of universal information access.
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The importance attached to this subject in management schools.The importance of knowledge management is also corroborated by various research studies.
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A survey by Pricewaterhouse Coopers and World economic forum found that 95% ofCEO’s saw KM as an essential ingredient foe the success of their company.
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According to the International Data Corporation, companies worldwide are expected todramatically increase their knowledge management expenditure from $2 million in 1999to $12 million in 2003
 
 Roots of knowledge management
Learning organisation
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If an organisation conforms to the required norms and can be termed as a learning organisation,then it becomes one of the start point of knowledge management.
Intellectual assets
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The intellectual assets in an organisation is in the people have gained expertise through years ofwork experience and is tacit in nature. This knowledge has to made explicit and managed inorder to leverage on it and gain competitive advantage.
Knowledge based systems
The systems that are evolved in an organization to facilitate the smooth functioning of theorganization should facilitate harnessing the existing knowledge in the organization. Thesesystems could be a basis of knowledge management.
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